[Introduced January 19, 2012; referred to the Committee on
Government Organization; and then to the Committee on the
Judiciary.]

____________

A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §29A-3-19, relating
to implementing a quality control procedure for agency rules.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §29A-3-19, to read as
follows:

ARTICLE 3. RULE MAKING.

§29A-3-19. Quality control procedure for agency rules.

(a) This section may be known and cited as the “Quality
Control Procedure For Agency Rules Act of 2012”.

(b) Legislature findings and purpose:

(1) West Virginia has consistently been considered one of the
more difficult states for businesses to thrive for various reasons;

(2) One of the key reasons this state has been consistently
rated as a difficult jurisdiction for businesses is because the
state’s regulatory environment is rated as one of the most
burdensome in the country;

(3) This burdensome regulatory environment has had a
significantly negative impact on economic development and growth in
this state;

(4) If meaningful action is not taken to address this
regulatory burden it is likely the state’s economic development and
growth will continue to be impeded;

(5) There must be a quality control procedure implemented
including a cost-benefit analysis that will provide for an
evaluation of the regulatory burden on business and industry;

(6) These burdensome rules must be repealed or modified in
order to improve this state’s business climate and economic health;
and

(7) New and modified rules must contain a sunset provision to
provide the Legislature with an opportunity to determine whether
these rules or modifications are accomplishing the intended
objective without creating a heavy burden on business and industry.

(c) Definitions:

(1) “Cost-benefit analysis” means the Joint Committee on
Government and Finance’s oversight of West Virginia University’s
and Marshall University’s evaluation of rules based on whether
these rules:

(A) Impede private sector job creation;

(B) Discourage innovation and entrepreneurial activity;

(C) Hurt economic growth and investment;

(D) Harm the state’s competitiveness;

(E) Limit access to credit and capital;

(F) Fail to utilize or apply accurate cost-benefit analyses;

(G) Create additional economic uncertainty;

(H) Are promulgated in such a way as to limit transparency and
the opportunity for public comment, particularly by affected
parties;

(I) Lacks specific statutory authorization;

(J) Undermines labor-management relations;

(K) Results in large-scale unfunded mandates on employers
without due cause; and

(L) Imposes undue paperwork and cost burdens on small
business.

(2) “Modification” means changes or amendments to an agency
rule that alters the function or material purpose of a rule.(3) “Moratorium” means a suspension of promulgating new rules
or the modification of existing rules.

(4) “Sunset” means the expiration of a rule or modificiation
on a date whereby it is repealed.

(d) Agency Rule and Modification Moratorium -- There shall be
a three-year moratorium on the adoption of new agency rules and
modification of existing rules beginning on the effective date of
this legislation while the cost-benefit analysis for existing rules
required under subsection (e) is being conducted. However, this
subsection shall not apply to new emergency rules or new rules or
modifications required by federal or state law.

(e) Cost-Benefit analysis for existing rules. -- All existing
rules in effect upon the effective date of this legislation shall
undergo a cost-benefit analysis within three years beginning on the
effective date of this legislation. The cost-benefit analysis shall
be conducted by the Joint Committee on Government and Finance
through a partnership between West Virginia University and Marshall
University. The Joint Committee on Government and Finance shall
oversee the universities efforts in conducting this comprehensive
cost-benefit analysis of all existing agency rules. The
universities shall prepare and submit a final joint report to the
Joint Committee on Government and Finance within four years of the
effective date of this legislation that includes its findings and
recommendations. The Joint Committee on Government and Finance
shall review the universities’ final joint report detailing its
findings for each agency rule. After the Joint Committee on
Government and Finance reviews the universities’ final joint report
it may make modifications and shall adopt its final report. A copy
of the Joint Committee’s final report shall be provided to the
Speaker of the House of Delegates, the Senate President, the
Governor and the Board of Regulatory Reform established in
subsection (g) within five years of the effective date of this
legislation.

(f) Post Moratorium Rules and Modifications. -- Any state rule
promulgated or modified after the moratorium required by subsection
(d) shall contain a seven-year sunset provision. Additionally,
these post-moratorium rules or modifications must undergo a cost-benefit analysis defined in subsection (c), subdivision (1),
conducted by a partnership between West Virginia University and
Marshall University with oversight by the Joint Committee on
Government and Finance prior to being promulgated or modified to
determine if the renewal or modification will create an undue
burden on business and industry. The universities shall prepare
and submit a final joint report to the Joint Committee on
Government and Finance prior to a modification becoming effective
that includes its findings and recommendations. The Joint
Committee on Government and Finance shall review the universities
final joint report detailing its findings for each agency rule or
modification. After the Joint Committee on Government and Finance
reviews the universities final joint report it may make
modifications and shall adopt a final report. The Joint Committee
on Government and Finance shall submit a copy of the final report
to the Speaker of the House of Delegates, the Senate President, the
Governor and the Board of Regulatory Reform established in
subsection (g) prior to the post-moratorium rule or modification
becoming effective.

(g) Board of Regulatory Reform:

(1) The Governor shall establish the Board of Regulatory
Reform within the Department of Administration.

(2) The Department of Administration shall provide the Board
of Regulatory Reform with staff who are presently employed by the
agency.

(3) The Department of Administration shall provide the Board
of Regulatory Reform with facilities from their existing
operations.

(4) The Board of Regulatory Reform shall elect a chairman by
a majority vote who will serve a biannual term.

(5) The Governor shall appoint at least seven persons to serve
on the Board of Regulatory Reform who will not be compensated for
their services.

(6) In selecting persons to serve on the Board of Regulatory
Reform, the Governor shall choose one person who is a
representative of the West Virginia Chamber of Commerce, one person
who represents the West Virginia Manufacturer’s Association, one
person who represents the West Virginia Business and Industry
Council, one person who represents the West Virginia Department of
Commerce, one person who represents the West Virginia Business
Roundtable, one person who represents West Virginia University and
one person who represents Marshall University.

(7) The Board of Regulatory Review shall develop its own
internal rules and procedures that shall include the following:

(A) Meet on a monthly basis;

(B) Require staff to establish and monitor a website that
allows individuals associated with business and industry to
anonymously comment on existing rules that are negatively impacting
their business or industry;

(C) By a majority vote, make recommendations to the Governor
based upon their own experience, expertise, and communications with
other who are affected by overly burdensome business regulations;

(D) By a majority vote, make recommendations to the Governor
based upon petitions received from business and industry, with or
without a hearing, to terminate or modify rules by businesses or
industries aggrieved by agency rules; and

(E) By a majority vote, make recommendations to the Governor
regarding the termination or modification of agency rules after
reviewing the Joint Committee on Government and Finance’s final
report regarding the cost-benefit analysis of an agency rule and
post-moratorium proposed new rules or modifications.

(h) Severability. -- If any provision of this section or
application thereof to any person or any circumstance is held
invalid, such invalidity shall not affect other provisions or
applications of this section which can be given effect without the
invalid provision or its application, and to this end the
provisions of this section are declared to be severable.

NOTE: The purpose of this bill is to establish a quality
control procedure for agency rules.